Hillside issues $1,400,000 of 5%, 15-year bonds dated January 1, 2021, that pay interest semiannually on June 30 and December 31. Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3The bonds are issued at a price of $1,713,594.Required:1. Prepare the January 1 journal entry to record the bonds’ issuance.2(a) For each semiannual period, complete the table below to calculate the cash payment.2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization.2(c) For each semiannual period, complete the table below to calculate the bond interest expense.3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.4. Prepare the first two years of a straight-line amortization table.5. Prepare the journal entries to record the first two interest payments. Prepare the January 1 journal entry to record the bonds' issuance.View transaction listJournal entry worksheet1Record the issue of bonds with a par value of $1,400,000 on January 1, 2021at an issue price of $1,713,594.Note: Enter debits before credits.DateJanuary 01Record entryGeneral JournalClear entryDebitCreditView general journal Complete this question by entering your answers in the tabs below.2(a)2(b)Req 12(c)Req 2A to 2CFor each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortization, and (c) the bond interest expense. (Round your finalanswers to the nearest whole dollar.)Par (maturity) valueBond priceReq 3Semiannual cashpaymentReq 4Annual RatePar (maturityvalue)PremiumamortizationReq 5=YearPremium onBonds PayableBond interestexpense< Req 1=Semiannual cashinterest paymentSemiannual periodsReq 3 >Straight-line premiumamortization

Journal entries refer to the concept of noting all the daily transactions of a company in its books…

Answered: The bonds are issued at a price of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Problem 14-2A (Algo) Straight-Line: Amortization of bond premium LO P3

The bonds are issued at a price of $1,713,594.

Required:
1. Prepare the January 1 journal entry to record the bonds’ issuance.
2(a) For each semiannual period, complete the table below to calculate the cash payment.
2(b) For each semiannual period, complete the table below to calculate the straight-line premium amortization.
2(c) For each semiannual period, complete the table below to calculate the bond interest expense.
3. Complete the below table to calculate the total bond interest expense to be recognized over the bonds' life.
4. Prepare the first two years of a straight-line amortization table.
5. Prepare the journal entries to record the first two interest payments.

Prepare the January 1 journal entry to record the bonds' issuance.
View transaction list
Journal entry worksheet
1
Record the issue of bonds with a par value of $1,400,000 on January 1, 2021
at an issue price of $1,713,594.
Note: Enter debits before credits.
Date
January 01
Record entry
General Journal
Clear entry
Debit
Credit
View general journal

Complete this question by entering your answers in the tabs below.
2(a)
2(b)
Req 1
2(c)
Req 2A to 2C
For each semiannual period, compute (a) the cash payment, (b) the straight-line premium amortization, and (c) the bond interest expense. (Round your final
answers to the nearest whole dollar.)
Par (maturity) value
Bond price
Req 3
Semiannual cash
payment
Req 4
Annual Rate
Par (maturity
value)
Premium
amortization
Req 5
=
Year
Premium on
Bonds Payable
Bond interest
expense
< Req 1
=
Semiannual cash
interest payment
Semiannual periods
Req 3 >
Straight-line premium
amortization

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